Space Commercialization in the

Decade Ahead—Economic

Opportunity!

GW University

November 12th 2007

Mike Cook

Senior Vice President

Hughes

HUGHES PROPRIETARY2H37283 1/12/08

Satellite Broadband Powering theEconomy

Integrators/ServiceProviders

Entertainment & SportsRestaurantsGovernment

! Toyota Lexus

! Daimler Chrysler

! VW

Automotive Lodging

! Best Western

! Wyndham

! Choice Hotels

Retail

! Albertson’s/USSC

! Best Buy

! Blockbuster Video

! Dollar Tree Stores

! Jiffy Lube

! Kmart

! Lowe’s

! Rite Aid

! Wal-Mart

! Walgreens

! TJ Maxx

! CSK Auto

! Goody’s

! Safeway

! Foot Locker

! CVS

! BP Amoco! Chevron! ExxonMobil! Shell! Nabors! Pemex

Oil and GasFinancial

! Wendy’s

! Jack in the Box

! Sonic

! Denny’s

! YUM Brands

! McDonalds

! Army Corps ofEngineers

! PennsylvaniaEmergency Svcs

! Florida Emergency Svc

! Texas Department ofPublic Safety

! Gtech

! National Cinema Network

! AMF Bowling

! Playwin, India

! Regal CineMedia

! STAR TV

Hughes is a leading provider to these end markets

! Telesat

! Telstra

! TelecomMalaysia

! KoreaTelecom

! Telmex –Mexico

! Telefonica

! TelecomSouthAfrica

! Edward Jones

! VISA

! HSBC! CitiCorp

! AGF (AIG)! AG Edwards

! Itau Bank

! ReserveBankof India

! Banco doBrasil

HUGHES PROPRIETARY3H37283 1/12/08

" Use of digital video applicationsgrowing throughout US

– Digital Signage

– Business IP TV for training andcommunications

" Technologies are combining tosignificantly reduce thetransmission costs: DVBS-2satellite coding systems andMPEG4

" Business models are beingtested:

– Advertising funded

– Branding

– Hybrid

Digital Media Services:

HUGHES PROPRIETARY4H37283 1/12/08

Combining Satellite and TerrestrialTechnologies Provides High Network Availability

LAN

HughesNet

Network

Satellite Broadband

Wireline Broadband

" Each branch site has satellite andwireline access (DSL and T1 fill in)

" Applications use one path as primary

" Network automatically re-routes in theevent of a failure

" Bandwidth is aggregate of satellite and

wireline paths

Data

Cente

rs

VR

LAN

Eg, 768 kbps

Upstream

128-

384 kbps

384-

512 kbps

PBRHughes

HUGHES PROPRIETARY5H37283 1/12/08

SPACEWAY™: Designed for Data

" SPACEWAY 3 successfullylaunched by Ariane onAugust 14th

" First commercialregenerative satellite

" Optimized for datanetworking not broadcasting

" Advanced technologiesinclude on board processingand phased array antennasystem

" Commercial servicesprojected for 1Q08

HUGHES PROPRIETARY6H37283 1/12/08

SPACEWAY Overview

" First full mesh commercial satellite system– 10 Gigabits/second capacity: 5 – 7 times existing satellites

– Core IP VPN services and Bandwidth-on-demand

" Uplink speeds

– 2 Mbps

– N x 16 Mbps

" Downlink carrierspeeds:

– 440 Mbps

" On-board packetreplicator

Need picture

1.2k

9.8k

18.1k 25.7k

31.5k12.4k

5.6k

3.6k 9.7k 61.1k 70.0k 36.7k 44.6k49.2k

70.8k16.8k

12.9k

13.3k32.6k

14.6k19.8k

37.9k 28.1k 80.2k 72.0k 65.0k87.2k

91.7k102.2k

28.3k

60.8k

41.5k

37.9k25.7k

34.5k13.6k 36.5k 50.3k 65.0k 69.1k 89.1k

80.2k84.6k

122.7k

23.8k

39.0k

59.5k

8.5k

12.6k14.8k

56.4k20.4k 38.7k 81.1k 83.9k 116.4k

115.5k97.7k

99.6k

41.0k

43.9k

8.4k

29.7k

46.9k21.0k

37.7k 18.4k 68.1k 103.7k 136.9k85.2k

92.5k

44.8k

138.6k

115.2k

59.2k

49.0k

28.5k

21.5k21.2k

20.4k 25.7k 93.1k 115.3k83.4k

37.5k

.0k

2.1k

24.9k

26.8k

.6k

16.7k

20.2k

14.8k6.2k

5.8k16.0k 19.8k 18.4k

.2k

.0k

10.0k

13.1k

23.1k

.0k

.0k

SatelliteFlexible Capacity

AllocationBase Capabilities

Key Attributes

HUGHES PROPRIETARY7H37283 1/12/08

SPACEWAY Services Capabilities

NOC

Hughes

NOC

Normal Priority Data

High Priority Data

Constant Rate

Low Vol. Low Latency

IP/MPLS

Current Ku-band SystemsSPACEWAY SystemInternet

Data

Ctr

Data

Ctr

" Multiple VPN and access plans to address the entire range of Hughes market segments:consumers/SMB, midmarket, and enterprise

" Full-mesh connectivity enables simultaneous networking with:

– Primary and backup data center

– Regional offices distribution centers and HQ

– Internet gateway and intranet sites

" Four end-end class of services, including constant rate for low jitter applications

HUGHES PROPRIETARY8H37283 1/12/08

Indicative Price Comparison

$0

$5,000

$10,000

$15,000

$20,000

$25,000

MPLS Spaceway

HAN

Spaceway

High QoS

VPN

Monthly Cost (including equipment amortization)

" Example– Typical 50-site network

– Objective is 256 kbps minimum inbound bandwidth (DSL + T1 VPN assumes morelike 128 kbps) from the remote and 1.5 Mbps–3 Mbps at data center

– HAN configuration is Spaceway plus DSL or T1 at each site

$0

$2,000

$4,000

$6,000

$8,000

$10,000

DSL + T1

VPN

Spaceway

High priority

Spaceway

and DSL

Monthly Cost (including equipment amortization)

High QoS Network Basic IP-VPN

HUGHES PROPRIETARY9H37283 1/12/08

Satellites have a Key Role in theBroadband World

" MPLS:

– Replacing frame relay

– Pushed by telcos as they migrate to IPinfrastructure

– QOS, Mesh, typically fractional T1 access

– Relatively expensive

" DSL

– Coverage varies between 50% and 85% ofenterprise locations

– Performance dependent on location

– No QoS/SLAs

– Needs VPN for networking

" Cable

– More limited coverage than DSL

– No QoS/SLAs

" EVDO

– Similar coverage to DSL

– Highly variable service

– No QoS/SLA

– Unknown contention issues

" WiMax

– Underdeployed

– Will compete primarily with DSL

" Performance:

– 2.0/15 Mpbs

– 16/30 Mbps

" SLAs:

– Full managed network options

– Performance and network SLAs

" MPLS Like QoS

– Full Mesh small dish to small dish

– Classifier to allow service differentiation

– Multiple service plans from a single terminal

– Bandwidth on demand capability and billing

– Low jitter services

" Roles:

– Primary networking:

! Full mesh with additional service plan overlays andon demand bandwidth

! Ideal for small networks as well as large

– MPLS network integration

! Integrates with MPLS backbone

! More bandwidth and availability than typical MPLSnetwork (using HAN configuration)

! Lower cost than MPLS

! Additional service overlay (e.g. internetaccess/teleconferencing)

– Backup networking

! Overlay of terrestrial network infrastructure withhigh speed and on demand bandwidth

! High capacity trunking and back up

Terrestrial Broadband Spaceway

HUGHES PROPRIETARY10H37283 1/12/08

Consumers and SMBs use SatelliteBroadband

" Broadband Internet accessservice for those overlookedby cable/DSL

" More than 365,000 Hughesconsumer subs at end of3Q07

" Activating ~12,000 subs permonth with controlledmarketing expenditure*

" Key business characteristics

– Great synergy with enterprisebusiness on platform, spacesegment, back office support(thus sharing costs)

– Includes residential and smallbusiness users

Consumer Density by ZIP Code

! All 50 states and Canada

! More than 26,000 ZIPs

Current Subscriber Base

! Profitable

! Generating positive cash since 2004

*(during first half of 2007)

HUGHES PROPRIETARY11H37283 1/12/08

Largest Satellite-Based InternetProvider to the Consumer/SMB Market

" Targeting 10–15 million

households and 3.5 million

SMBs

" 20% revenue and subscriber

CAGR over past years

Consumer/SMB Revenue ($ in millions)

Consumer/SMB ARPU

$51 $56 $58 $62$60

$0

$20

$40

$60

$80

2003 2004 2005 2006 Q2/2007

$163$203

$247$313$292

353K

327K

274K

224K

180K

$0

$100

$200

$300

$400

2003 2004 2005 2006 TTM

06/2007

0

80

160

240

320

400

Revenue Subscribers

HUGHES PROPRIETARY12H37283 1/12/08

Emerging Mobile Systems: 2008 – 2009

Hybrid mobile networking

for the US

State-of-the-Art

cellular terminals

USER

TERMINALS

PUBLIC

NETWORK

G-28762 P 08/28/06

BSCCORE

NETWORK

Satellite

Gateway

WIMAX or UMTS Cellular

Network

Integrated satellite

and terrestrial

mobile voice and

data systems